Correlation Between Hung Sheng and Goodway Machine
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Goodway Machine at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hung Sheng and Goodway Machine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hung Sheng Construction and Goodway Machine Corp, you can compare the effects of market volatilities on Hung Sheng and Goodway Machine and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hung Sheng with a short position of Goodway Machine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Goodway Machine.
Diversification Opportunities for Hung Sheng and Goodway Machine
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hung and Goodway is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Goodway Machine Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodway Machine Corp and Hung Sheng is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hung Sheng Construction are associated (or correlated) with Goodway Machine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodway Machine Corp has no effect on the direction of Hung Sheng i.e., Hung Sheng and Goodway Machine go up and down completely randomly.
Pair Corralation between Hung Sheng and Goodway Machine
Assuming the 90 days trading horizon Hung Sheng Construction is expected to generate 1.51 times more return on investment than Goodway Machine. However, Hung Sheng is 1.51 times more volatile than Goodway Machine Corp. It trades about 0.04 of its potential returns per unit of risk. Goodway Machine Corp is currently generating about -0.02 per unit of risk. If you would invest 2,265 in Hung Sheng Construction on August 31, 2024 and sell it today you would earn a total of 430.00 from holding Hung Sheng Construction or generate 18.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Hung Sheng Construction vs. Goodway Machine Corp
Performance |
| Timeline |
| Hung Sheng Construction |
| Goodway Machine Corp |
Hung Sheng and Goodway Machine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Sheng and Goodway Machine
The main advantage of trading using opposite Hung Sheng and Goodway Machine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Goodway Machine can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Goodway Machine will offset losses from the drop in Goodway Machine's long position.| Hung Sheng vs. Huaku Development Co | Hung Sheng vs. Ruentex Development Co | Hung Sheng vs. CTCI Corp | Hung Sheng vs. Information Technology Total |
| Goodway Machine vs. BES Engineering Co | Goodway Machine vs. Continental Holdings Corp | Goodway Machine vs. Kee Tai Properties | Goodway Machine vs. Hung Sheng Construction |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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